A Matching Model of Co-Residence with a Family Network: Empirical Evidence from China

Naijia Guo, Xiaoyu Xia and Junsen Zhang

The Economic Journal, 2022, vol. 132, issue 648, 2873-2917

Abstract: We develop a co-residence model between young adults and the elderly as an application of the Shapley–Shubik–Becker bilateral matching framework. This model captures competition between adult children and between parents and parents-in-law. Using microdata from China, we estimate our model by using a network simulation method to fill in partially unobservable marriage links. We find that our model explains the child-side and parent-side competitions observed in the data better than two alternative multinomial logit models with only one-sided competition. In addition, counterfactual experiments quantify the effects of changes in the one-child policy and housing prices on intergenerational co-residence.

Date: 2022
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